[valuemkt]

Look up a Gentleman by the name of Wade Pfau. He has written several books on retirement planning, and the one titled "Safety First" Retirement Planning has about half the book dedicated to the discussion of various types of annuities. While I am definitely not an annuity fan, I read the book on the advise of others to expand my knowledge on the various types of annuities. While I somewhat agree on hiring a fee based financial planner, I believe what you need first is to find a good tax accountant who can give you definitive advice on the tax based aspects of your situation. I believe that Pfau has a blog where you can ask questions pertinent to you situation.

[richs631]

Originally Posted by Gigi3000

I'm 63, cost basis $160000, gain $200000. Bank advisor offered indexed variable annunity, 10 year spread. Anyone familiar with these? I have no experience with annunities. Trying to figure out whether to take lump sum and just pay the $70000 tax bill or do the annunity. If I take the annunity I'd put it into index mutual funds. My situation is very simple...I have no income, lots of savings, no mortgage on home, no tax deductions. If take annunity, goal.would be income I guess. Not taking social security, maybe take at 65.or wait until 70...

In general, annuities are not your friend. But banks and brokers love them because of ongoing commissions.

[Mohawksin]

Originally Posted by Gigi3000

I'm 63, cost basis $160000, gain $200000. Bank advisor offered indexed variable annunity, 10 year spread. Anyone familiar with these? I have no experience with annunities. Trying to figure out whether to take lump sum and just pay the $70000 tax bill or do the annunity. If I take the annunity I'd put it into index mutual funds. My situation is very simple...I have no income, lots of savings, no mortgage on home, no tax deductions. If take annunity, goal.would be income I guess. Not taking social security, maybe take at 65.or wait until 70...

OP -- where did the money come from?. Did you inherit it? If so, the rules change and have not been mentioned. The question initially lies with a CPA in your state, then with a CFP.

[richs631]

Originally Posted by Gigi3000

Really? I don't know alot about taxes but I looked at the tax table for that amount and I saw 37%. There definitely is no other income. I sold a condo and am living off those proceeds. Thanks for your info

The tax table is misleading. You will not pay 37% on the full amount

[BlackHarley]

Hmmm....FINRA regulator bait?..Just sayin'

[tklloop]

The best option is to give me your money and trust me to do what’s best for both of us!! OH,, and take Social Security AS SOON AS you can!!

[MrFlorida]

Whenever somebody wants to sell me an annuity, I RUN..... commissions, fees, riders..... they are not what they seem..

[Hopeful Returnee]

Originally Posted by retiredguy123

Any income that you make in an annuity and withdraw will be taxed as ordinary income. That is one of the major disadvantages of annuities that many advisors neglect to tell you when they sell it to you. They claim that you are investing in the stock market but you don't get the advantage of the lower capital gains rate that you would normally receive outside of an annuity. But, all short term gains (less than a year) are taxed as ordinary income. So, to benefit from the lower capital gains rate outside of an annuity, you need to hold the investment for at least one year.

I would seriously consider just paying the capital gains tax and invest the money in a conservative portfolio of Vanguard index mutual funds. 30 percent S&P 500 Index Fund, 30 percent Short Term Bond Index Fund, and 40 percent money market fund. Then, do some independent research on investing before making any more financial decisions.

If your annuity is non-qualified that means some of the money was taxed and some was not. In my case the original investment was taxed and the profit made over the years has not been taxed. I was told by the company that the profit will be taxed as regular income and not as capital gains.

[Singerlady]

Originally Posted by Gigi3000

I'm 63, cost basis $160000, gain $200000. Bank advisor offered indexed variable annunity, 10 year spread. Anyone familiar with these? I have no experience with annunities. Trying to figure out whether to take lump sum and just pay the $70000 tax bill or do the annunity. If I take the annunity I'd put it into index mutual funds. My situation is very simple...I have no income, lots of savings, no mortgage on home, no tax deductions. If take annunity, goal.would be income I guess. Not taking social security, maybe take at 65.or wait until 70...

Consult a financial advisor! Plenty here for you…or wherever you are. Don’t consult an annuity guy. They’ll take their huge chunk up front. I had only annuities until I moved here. New hubby and financial advisor talked me into not buying more. They were RIGHT! Financial advisor put me in a moderately risky set of investments without annuities. Doing well! Monitored constantly. Waiting until my annuities ‘mature’ in order to get out of them or keep some depending on their growth. They’re only getting 2% now and I’m getting 8% in my other investments. Also consult your tax advisor.

[drstevens]

Originally Posted by Gigi3000

I'm 63, cost basis $160000, gain $200000. Bank advisor offered indexed variable annunity, 10 year spread. Anyone familiar with these? I have no experience with annunities. Trying to figure out whether to take lump sum and just pay the $70000 tax bill or do the annunity. If I take the annunity I'd put it into index mutual funds. My situation is very simple...I have no income, lots of savings, no mortgage on home, no tax deductions. If take annunity, goal.would be income I guess. Not taking social security, maybe take at 65.or wait until 70...

Contact Ric Edelman's office at www.ricdelman.com for a free consultation.

[MandoMan]

Originally Posted by Gigi3000

I'm 63, cost basis $160000, gain $200000. Bank advisor offered indexed variable annunity, 10 year spread. Anyone familiar with these? I have no experience with annunities. Trying to figure out whether to take lump sum and just pay the $70000 tax bill or do the annunity. If I take the annunity I'd put it into index mutual funds. My situation is very simple...I have no income, lots of savings, no mortgage on home, no tax deductions. If take annunity, goal.would be income I guess. Not taking social security, maybe take at 65.or wait until 70...

Indexed mutual funds are a great place to put your money. In my opinion, annuities are among the worst places to put your money. They won’t give you that big an annuity, and usually when you die, it is gone. With a mutual fund, when you die, it can be passed on to your heirs. Put the money in the fund and leave it there. Don’t try to play the market. Don’t get nervous if it drops—it will go back up. You can arrange to have a certain amount put in your bank account every month, just like with Social Security, but better if you just let it grow. I like T Rowe Price New Horizons Fund right now. My mutual funds have doubled in value since the Fall of 2016. That’s 100% in five years. Don’t listen to the people who say that at your age you should put part of it in bonds, and part in the money market, etc. that’s how brokers get their fees and get rich. With a good indexed mutual fund from a company with a very good reputation, you pay very little in fees. By contrast, some of these brokerages and money managers will charge you a lot in fees, like thousands a year.

[Hiltongrizz11]

An annuity is an insurance product.
Exist for a reason and some people can make sense out of them for their situation.

[Notsocrates]

[QUOTE=Gigi3000;1990445]

Originally Posted by CoachKandSportsguy

OK, a commercial finance manager here, and this board is not the place to find the best answer for your particular situation. Please find a fee only, independent CFP, and ask him to build you a model of your cash flow versus your assets and your tax situation. Living off of assets versus living off of income is not the best situation

finance guy who to just get a tax question answered. Also I'm staying liquid to possibly buy a small farm in the next year or two. Monthly expenses are only $1200 mo currently.

Then consult an accounrant.
Advice is wortth what you pay for it.

[DaleDivine]

Originally Posted by tklloop

The best option is to give me your money and trust me to do what’s best for both of us!! OH,, and take Social Security AS SOON AS you can!!

Best answer yet...

[waynehal55]

[QUOTE=Gigi3000;1990350]I'm 63, cost basis $160000, gain $200000. Bank advisor offered indexed variable annunity, 10 year spread. Anyone familiar with these? I have no experience with annunities. Trying to figure out whether to take lump sum and just pay the $70000 tax bill or do the annunity. If I take the annunity I'd put it into index mutual funds. My situation is very simple...I have no income, lots of savings, no mortgage on home, no tax deductions. If take annunity, goal.would be income I guess. Not taking social security, maybe take at 65.or wait until 70...[/QUOTE

NEVER buy a variable annuity, I purchased one almost 20 years ago.
The commission the seller makes and annual maintenance fees are outrageous.
I am a Vanguard investor for 4 decades and should have known better, I listened to a "friend". I periodically make withdrawals and was lucky that the stock market was very strong. I should have just put the money in a S&P fund, Vanguard charges only 4 basis points, a year.